enough Common Cause believes that the overbelming lack of citizen confidence in government stands as persuasive testimony to the inadequacy of the response of the past. Detailed financial disclosure requirements combined with a strong and independent enforcement mechanism can make a reality of heretofore ignored codes of ethics.

THE WAVE OF REFORM

Over forty states and numerous local governments have taken significant steps to deal with the problems of money and secrecy in the last two years Obviously, this legislation is uneven in quality and effectiveness, but on the whole it reflects sincere, constructive achievement. A major focus of this reform movement has been the issue of state and local government ethics.

Vinually every state and local government has some provisions restricting public officials and employees from certain activities 3 Many of these have been reworked and strengthened in recent years. Twenty-eight states require certain public officials to disclose periodically certain of their financial interests." Half of these laws have been enacted in the last two years, including most of the stronger ones. These laws vary widely in scope and content. Some apply only to state elected officials, others apply to local elected officials and employees as well. Some require minimal disclosure; others require nearly complete disclosure Taken as a whole, these laws represent a solid base on which to build further reform. Of the 14 independent state ethics commissions that monitor and enforce state conflict of interest and financial disclosure laws. I have been established in the last two years to

Common Cause supports passage of comprehensive state conflict of interest law as the most effective means of establishing a mandakory minimum standard of conduct for state and local public officials. It is unrealistic both as a political and a practical matter to expect that tach municipality and county will enact its own conflict of interest ordinance. For example, the Maryland Financial Disclosure Act of 1973 directed local governments to enact financial disclosure requirements for local officials and candidates that were "substantially" those required by the act for state officials and candidates. The attorney general of Mary. land opined, however, that the provision was "intended to be directory, not mandatory," largely on the grounds that such a provision is virtually unenforceable." The resulting confusien and the burden of having to legislate in this complex area have led at least one local official in suggest publicly that the state amend its law to cover incal officials "

Selected State Statutes. A brief survey of 4 of the 13 state laws that require local as well as stare officials to disclose periodically certain of their financial interests gives an idea of the variety in scope and content of these laws. 43

In 1973 the Arkansas General Assembly amended the state's conflict of interest statute to

5

include under the definition of "public official" each person holding a position of public trust in or under any county or municipal government, any school district. . . ." This includes division heads within an agency or department of government. There is a code of ethics for public officials and a requirement that, on or before January 31 of each year, they file with the secretary of state statements that must include: (1) the name of any entity, subject to the jurisdiction of a regulatory agency, in which the official has a direct financial interest in excess of $1,000, or of which he is an official or director; (2) the type of business from which the official received compensation in excess of $1,500; and (3) as to attorneys and others practicing before regulatory agencies, the name of the official's firm. Candidates also must file statements.

The California Political Reform Act - the initiative approved by 70% of California voters in June 1974-prohibits any state or local public official from participating in governmental decisions in which he knows, or has reason to know, he has a substantial financial interest. The law requires state and local governmental bodies at the most decentralized level possible" to adopt conflict of interest codes to implement the policy of the state code of ethics and to require certain designated employees to file financial disclosure statements. These codes are subject to approval by a higher code-reviewing body. The state law requires state and local elected officials, candidates, chief administrative officers, and city managers to file annual disclosure statements with the Fair Political Practices Commission. The statements must include the identity of investments and interests in real property (and whether the fair market value exceeded $10,000 or $100,000). Incumbents must disclose the identity of each source of income aggregating $250 or more (or $25 if a gift) and whether the income exceeded $1,000 or $10,000. The investments, interests in real property, and income of the official's spouse and dependent children, and of an entity in which the official holds a 50% or greater ownership interest (and investments of an entity in which the official or spouse owned a 10% or greater interest), must be disclosed. Sources of income for legal or brokerage services must be disclosed only if the official received a pro rata share of $1,000 or more.

The 1974 South Dakota act requires candidates for county commissioner, mayor, city commissioner, councilman in cities of the first class, and school board membership in school districts with an enrollment of more than 2,000 students to file a statement of financial interests with their county auditor. The statement must be amended after the person takes office. Candidates for Congress and various state elected and appointed officials are also covered by the act. Officials must disclose the nature of any enter. prise that contributes either more than 10% of (or more than $2,000 to) the gross income of the person and the person's family living at home, or in which the person or any member of his household controls more than 10% of the capital or stock. Values need not be reported

The Washington State initiative, approved by 72% of the voters in November 1972, requires all state and local elected officials (except precinct committcemen) to file, on or before January 31 of each year, a sworn statement of financial affairs with the Public Disclosure Commission. Candidates must also file. The person must identify, for himself and his family living in the household, for the preceding twelve months: each public or private office, employment, directorship, and trusteeship held; each direct financial interest in excess of $500 (or $5,000, if a savings account or an insurance policy); each creditor to whom $500 or more was owed (except retail installment transactions); each person for whom legislation, rules, rates, or standards were prepared, promoted, or opposed for compensation; each entity from whom compensation in excess of $500 was received; each entity in which any office, directorship, general partnership interest, or an ownership interest of 10% or more was held; and the nature of the interest and the identity of any source from which such entity itself received compensation in excess of $500. The statement must also include all real property in the state with an assessed valuation in excess of $2,500 that was held, acquired, or divested; all real property with an assessed valuation in excess of $5,000 in the state that was held by an entity in which the filer held an ownership interest of 10% or more; and such other information as the commission may deem necessary. Value may be reported by category of amount (e.g.. $1,000 to 5,000, or $25,000 or more).

Local Government Action. Comprehensive state conflict of interest laws merely establish a mandatory minimum standard of conduct. Where state laws are enacted, local governments should supplement them to take care of problems unique to their locality. Creative local experiments that work can spawn amendments to state laws. Where there are no laws or inadequate ones, local governments should move to fill the breach. The model act expressly empow ers local governments to enact ordinances in this area provided that their provisions are no less strict than the state act. In the absence of such express authority, a local government's home rule powers should be sufficient to allow it to legislate in this area."

In recent years local governments have become increasingly active in the money and secrecy areas. The Maryland General Assembly's financial disclosure directive and a 1973 California law authorizing local governments to require more detailed or complete disclosure of campaign contributions and expenditures''45 have stimulated dozens of local ordinances in those states. Financial disclosure ordinances have been enacted in Anchorage (Alaska), in Arlington and Fairfax Counties (Virginia), and in numerous Maryland and California localities. San Diego city has adopted campaign financing and lobbying ordinances; San Diego County has ordinances on campaign financing, financial disclosure, and lobbying; New York City has an excellent lobbying law. 47 Harford County (Maryland) has attacked

65-728 0-76-7

money and secrecy problems with vigor. In 1972 the voters adopted a charter that provides for open council meetings and public access to public records. The charter requires the council to enact a code of ethics, to set campaign expenditure limits, to establish financial disclosure requirements, and to create a board of ethics.48 The council has enacted the ordinances mandated by the charter, it has required campaign contribution and expenditure disclosure that is more detailed than that required by state law, and has required persons who lobby the council to register and report their lobbying expendi tures. Other local governments have passed or have under consideration similar ordinances.

CONCLUSION

The tales of corruption in federal, state, and local government have brought about pollster Louis Harris's "full-blown crisis of confidence" referred to at the beginning of this article. The question now is: What are we going to do about it? Fortunately, the answer is coming in resounding terms from interested citizens and problem-solving public officials who are acting to curb the influence of money and secrecy on the political system.

There is no more critical challenge before us than the restoration of citizen support for and confidence in our institutions of government. Numerous state laws and local ordinances represent a solid base on which to build further reform. They reflect the constructive efforts of many thoughtful public officials. Most importantly, recent reforms have demonstrated that citizens working with state and local officials can make a difference.

'Mike Royko, Boss. Richard J. Daley of Chicago (New York: E. P. Dutton & Co., Inc., 1971), p. 15. Copyright (c) 1971 by Mike Royko. Reprinted by permission of the publishers.

'U.S., Congress, Senate, Committee on Government Operations, Hearing on a Survey of Public Attitudes before the Subcommittee on Intergovernmental Relations of the Senate Committee on Government Operations. 93rd Cong., 1st sess., 1973, p. 7.

'Ibid., p. 8.

'Ibid., p. 9.

Ibid., p. 12.

"John W. Gardner, "Rebuild Pride in SelfGovernment," Common Cause Report from Washington, December 1973-January 1974, pp. 16-17.

"William L. Riordon, Plunkist of Tammany Hall (New York: E. P. Dutton & Co., Inc., 1963), p. 32. Reprinted by permission of the publishers.

Ibid., p 3.

Joel Weisman, "Top Lieutenant of Daley Cited in Land Trust Deal," Washington Post. 3 May 1974. 10See Leonard Downie. Jr., Mortgage on America (New York: Praeger Publishers, 1974).

"Bayless Manning, "The Purity Potlatch: An Essay on Conflicts of Interest, American Government, and Moral Escalation, 24 Federal Bar Journal 239, 253 (1964). 11Nathaniel Sheppard, Jr., "Politician, Fed Up, Seeks 'Honest Job," New York Times, 29 July 1973.

"U.S., Congress, Hearing on a Survey, p. 12. 14Other model state legislation, on campaign financing, lobbying disclosure, and open meetings, is available from Common Cause, 2030 M Street, N. W., Washington, D.C. 20036. The National Legislative Conference

6

Committee on Legislative Ethics and Campaign Financ ing has prepared Guidelines for State Legislation on Government Ethics and Campaign Financing (Lexington, Ky Council of State Governments, 1974) The National Advisory Commission on Criminal Justice Standards and Goals has prepared standards for conflict of interest legis lation (Community Crime Prevention, Washington, DC: Government Printing Office, 1973, pp. 209-23). The National Institute of Municipal Law Officers has prepared a model conflict of interest ordinance. See also Robert H Freilich and Thomas M. Larson, Conflicts of Interest: A Model Statutory Proposal for the Regulation of Municipal Transactions, 38 University of Missouri-Kansas City Law Review 373 (1970), and "Conflicts of Interest of State Legislators," 76 Harvard Law Review 1209, 1213 (1963).

See Lawrence Gilson, Money and Secrecy (New York: Praeger Publishers, 1972). This is a Common Cause book summarizing state laws as of 1972 in the four money and secrecy areas. See also National Association of Attorneys General, Committee on the Office of Attor ney General, "Legislation concerning the Corruption of Public Officials," January 1974.

1*McQuillin, The Law of Municipal Corporations, Vol. 3. 12.136 (3rd ed.) (1973 Rev. Vol.).

"See Martin Waldron, "Study Finds Contractors in Four States Help Politicians," New York Times. 26 August 1973, and Monroe Karmin, "Throughout the US. Public Contracts Tied to Campaign Gifts, Wall Street Journal, 17 October 1973 See also Center for Analysis of Public Issues, Blueprint for Scandal: The Engineering Business in New Jersey (Woodbridge, N.J.: New Jersey Appellate Printing Company, 1974).

See, eg, Connecticut General Statutes Annotated. $1-67 (West Cum. Supp. 1973), Annotated Missouri Stanutes, §105.460 (Vernon 1966), and New Mexico Statutes Annotated, 5-12-10 and $15-43-15.4 (Smith Supp. 1973).

Stein v. Howlett, 289 N.E. 2d 409, 413 (1972). appeal dismissed for want of a substantial federal question, 412 U.S. 925 (1973).

Louis D. Brandeis, Other People's Money (New York. Frederick A. Stokes Company, 1932), p. 92. "Revised Code of Washington Annotated, $42.17.240 (Initiative 276 of 1972) (West Supp. 1973).

"Sam S. Reed, Assistant Secretary of State of the State of Washington, Testimony To Be Delivered to Alaskan Legislators, February 18, 1974, pp. 2-3.

11Washington's Tough New Law Upheld by State Supreme Court," American Legislator 4 (March 1974): 1

**United Press International in Los Angeles Times, 4 January 1974.

15 Associated Press in San Francisco Chronicle, 4 January 1974.

**See, e.g., Griswold v. State of Connecticut, 381 U.S. 479 (1965).

"See, e.g., New York Times v. Sullivan, 376 U.S. 254 (1964).

Burroughs and Cannon v. United States, 290 U.S. 534 (1933); United States v. Harriss, 347 U.S. 672 (1954); Stein v. Howlett, supra: Fritz v. Gorten. 517 P.2d 911 (1974). appeal dismissed for want of a substantial federal question, 42 U.SL.W. 3646 (1974).

"City of Carmel-by-the-Sea v. Young, 466 P.2d 225, 226-27 (1970).

"Editorial. "The Need for Local Disclosure Laws," Washington Post, 3 October 1973.

"See cases cited in Wigmore, Evidence, Vol. 8, §2313 (McNaughton rev. 1961).

11 Fritt v. Gorten, supra, p. 926.

33 See Fred J. Cook, "The Cleanup of New Jersey." Nation (July 16, 1973), p. 38.

"Charles A. Krause, "Maryland Prosecutor Green Guilty, Washington Post, 7 February 1974.

"Douglas Watson, "Anderson Guilty of 32 Counts in Md. Kickbacks," Washington Post, 21 March 1974.

34See Robert M. Rhodes, "Enforcement of Legislative Ethics: Conflict within the Conflict of Interest Laws, 10 Harvard Journal on Legislation 373 (1973).

"Gilson, Moner anal Secrecy

*As of June 25, 1974 the following state states required certain public officials to disclose perućcały certain of their financial interests (the date of enactment t included Cole of Alabama Recompiled. Tak 55. 1327 (19) (1973) (Michie Cum. Supp. 19731; Capter 199 Á the Laws of 1974 of the Arcona Legislature. Arkans Statutes, $12-3006 (1971) (Bobbs-Merrill Cam. Supp 1973). California Political Reform Act of 1974 California Government Code Annotated. 187200. Colorado Revised Statutes 1963, 53-32-2 (as amended by initiative no. 3 of 1972), Connecticut General Saman Annotated. $1.76 (1971) (1973 Cum Supp. 1, Floride Statutes Annotated. $112.313 (1969) (West 1973) and H.B. 3418 of the 1974 Session, Hawaii Revard Sontwrs. 184-17 (1972) (Supp. 1973), Illinois Annotated Summers. Ch. 127 $604A-101 (1972) (Smith-Hurd Cam. Supp 1974), Indians Code 1971. Chapters 2-2.1. 3 and 4-24 amended by Acts 1974 Public Law No. 4, Chapter 353 of the 1974 Session Laws of the Kansas Legulature and Kansas Statutes Annotated. $75.430211970) (Cum Supp 1973), Kentucky Revised Stararez, §61,710 (1972) (Baldwin Cum Supp 1972). Maine Revised ShawWIPE Title 3. 1391(1974), Annotated Code of Murland Att. 33.829-4(1973) (Michie Cum Supp. 1971: Chapter 470 of the 1974 Session Laws of the Minnesota Legislature. Revised Statutes of Nebraska. 149-1106 (1971) (Cum Supp 1972): New Mexico Statutes Annotated, $5-12-10 (1967) and $15.43-15.4 (1969) (Smith Supp 1973) New York Public Officers Law, $74(3) (j) (1955) (West Cum. Supp 1973). Ohio Revised Code Annotated. $102.02 (1973) (Page, Current Service No. 3 1974), Chapter 121 of the 1974 Session Laws of the South Dakota Legala ture, Enrolled Senate Bill No. 534 of the 1974 Session of the Oklahoma Legislature; Tenessee Code Annosztri 88-4125 (1972) (Bobbs-Merrill 1973), Revised Civil Sta tutes of Texas, Art. 6252-96 $3(1973) (Vernon Cam Supp. 1974), Utah Code Annotated 167-16-7 (1969) (Smith Supp. 1973). Code of Virginia Annotated $42 1-352.353. and 358 (1970) (Michie 1973); Revand Code of Washington Annotated, §42.17.240 (1972) and $42.22.050 (1959) (West Supp. 1973), West Virginia Code Annotated, $6B-1-1 (1968) (Michie Curn Supp 1973), and Wisconsin Statures 1973. Chapter 11 as created by Chapter 90. Laws of 1973. As of June 25. 1974, financial disclosure bills were pending in the Michigan and Pennsylvania legislatures; initiatives were planned for presentation in November 1974 in Alaska and Oregon; and attempts were being made to qualify initia tives for the 1974 election in Anzona and North Dakota

"The following commissions have jurisdiction over state ethics laws and have as members either no public officials or a minority of public officials - Alabama Ethics Commission: Code of Alabama Recompiled. The 55. §327 (24) (1973) (Michie Cum Supp 1973), Anzona Ethics Board Chapter 199 of the Laws of 1974 of the Arizona Legislature, California Fair Political Practices Commission California Government Code Annotated. $83100, Florida Commission on Ethics: H.B 2346 of the 1974 Session; Hawaii Ethics Commission: Hawai Revised Statutes. $84-21 (1972) (Supp. 1973); Indiana Ethics and Conflicts of Interest Commission Indume Code 1971. Chapter 4-2-6 as amended by Acts 1974 Public Law No. 4; Kansas Ethics Commission: Chapter 116 of the 1974 Session Laws of the Kansas Legislature. Louisiana Board of Ethics for State Elected Officials. Louisiana Statutes Annotated - Revised Statutet $42:1144 (1964) (West 1965); Maryland Financial Dis closure Advisory Board: Annotated Code of Maryland. Art. 33, 429-7 (1973) (Michie Cum. Supp. 1973), Min nesota Ethics Commission: Chapter 470 of the 1974 Ses sion Laws of the Minnesota Legislature, Ohio Ethics Commission: Ohio Revised Code Annotated, $102.05 (1973) (Page. Current Service No. 3 1974), Oklahoma Ethics Commission: Oklahoma Statute: Annotated. 7451408 (1968) (West Cum Supp 1973), Washington Public Disclosure Commission: Revised Code of Washington Annotated, §42.17.350 (1972) (West Supp 1973), and Wisconsin Ethics Board: Wisconsin Stuthie's

1973, $15.62 as created by Chapter 90, Laws of 197)

7

Arkansas, California, Flerida, Illinois, Kansas. New Mexico, Ohio, Oklahoma, South Dakota, Tennessee, Utah, Virginia, and Washington See Note 38 for citations to the statutes.

"For a general discussion of the powers of local gov ernments, see McQuillin, The Law of Municipal Corporations, Vol. 2, Chapter 10 (3rd ed.) (1966 Rev. Vol.).

"California Elections Code Annotated. $11503 (b) (Deering Supp. 1974).

"See Steve Carter, Financial Disclosure for Local

Government Officials Management Information Service Report Vol. 6 No. 3-B (Washington, D.C.: International City Management Association, March 1974), p. 1. "Common Cause News from the States, April 1974, p. 3.

Charter of Harford County. Maryland. §8217, 801-803, and 806 (adopted November 7, 1972).

APPENDIX

COMMON CAUSE MODEL CONFLICT OF INTEREST ACT

Section 1. Purpose.

The legislature hereby declares that public of fice is a public trust and that any effort to realize personal financial gain through public office other than compensation provided by law is a violation of that trust. In order to strengthen the faith and confidence of the people of the state in their government, the legislature further declares that the people have a right to be assured that the financial interests of holders of or candidates for public office present neither a conflict nor the appearance of a conflict with the public trust. Because public confidence in government can best be sustained by assuring the people of the impartiality and honesty of public officials, this act shall be liberally construed to promote complete disclosure.

Section 2. Definitions.

As used in this act, unless the context requires otherwise:

(a) "Business" means any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self-employed individual. holding company. joint stock company, receivership, trust, or any legal entity organized for profit;

(b)

Business with which he is associated" means any business in which the person or a member of the person's immediate family is a director, officer, owner, employee, or holder of stock worth $1,000 or more at fair market value, or any business that is a client of the person; (c) "Candidate for public office" means any person who has filed a declaration of candidacy of a petition to appear on the ballot for election as a public official, or who has raised or expended money in pursuit of public office, and any person who has been nominated by a public official or governmental body for appointment to serve as a public official;

(d) "Commission" means the state ethics commission established in section 8 of this act; (e) "Gift" means a payment, subscription, advance, forbearance, rendering or deposit of money, services or anything of value, unless

consideration of equal or greater value is received. "Gift" shall not include a political contribution otherwise reported as required by law, a commercially reasonable loan made in the ordinary course of business, or a gift received from a member of the person's immediate family or from a relative within the third degree of consanguinity of the person or of the person's spouse or from the spouse of any such relative;

"Governmental body" means any department, commission, committee, council, board, bureau, division, service, office, officer, administration, legislative body, or other establishment in the executive, legislative, or judicial branch of the state or a political subdivision thereof;

(g) "Immediate family" means a spouse residing in the person's household and dependent children;

(h) "Income" means any money or thing of value received, or to be received as a claim on future services, whether in the form of a fee. salary, expense, allowance, forbearance, forgiveness, interest, dividend, royalty, rent, capital gain, or any other form of recompense or any combination thereof;

(i) "Ministerial action" means an action that a person performs in a given state of facts in a prescribed manner in obedience to the mandate of legal authority, without regard to, or the exercise of, the person's own judgment upon the propriety of the action being taken;

() "Person" means a business, individual, corporation, union, association, firm, partnership, committee, club, or other organization or group of persons;

(k) Political contribution" means any advance, conveyance, deposit, distribution, transfer of funds, loan, payment, pledge, purchase of a ticket to a testimonial or similar fundraising affair, or subscription of money or anything of value, except volunteer services, in connection with a political campaign, and any contract, agreement, promise, or other obligation, whether or not legally enforceable, to make a political contribution;

(1) Public employee" means any individual who receives compensation at an annual rate of $20,000 or more from the state or any political

subdivision thereof or who is responsible for taking or recommending official action of a non-ministerial nature with regard to:

(1) contracting or procurement;

(2) administering or monitoring grants or subsidies;

(3) planning or zoning:

(4) inspecting, licensing, regulating, or auditing any person; or

(5) any other activity where the official action has an economic impact of greater than a de minimus nature on the interests of any person.

"Public employee" shall not include individuals who are employed by the state or any political subdivision thereof in teaching as disting. uished from administrative duties;

(m) "Public official" means any elected or appointed official in the executive, legislative, or judicial branch of the state or any political subdivision thereof, provided that it shall not include members of advisory boards that have no authority to expend public funds other than reimbursement for personal expense, or to otherwise exercise the power of the state or any political subdivision thereof.

Section 3. Restricted Activities.

(a) No public official or public employee shall use his public office or any confidential information received through his holding public office to obtain financial gain (other than compensation provided by law) for himself, a member of his immediate family, or a business with which he is associated.

(b) No person shall offer or give to a public official or public employee or candidate for public office or a member of his inmediate family or a business with which he is associated, and no public official or public employee or candidate for public office shall solicit or accept, anything of value, including a gift, loan, political contribution, reward, or promise of future employment based on any understanding that the vote, official action, or judgment of the public official or public employee or candidate for public office would be influenced thereby.

(c) No person shall offer or give to a public official or public employee or a member of his immediate family or a business with which he is associated, and no public official or public employee shall solicit or accept from any one per. son, gifts that exceed $100 in value in the aggregate in any twelve month reporting period.

(d) No public official or public employee or a member of his immediate family or a business with which he is associated shall enter into any contract valued at $500 or more with a governmental body unless the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. Any contract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of making of the contract.

(e) No public official or public employee shall represent a person or act as an expert witness for compensation before a governmental body where the action or non-action of the gov. ernmental body is of a non-ministerial nature, except in a matter of public record in a court of law; provided that this shall not apply to a public official or public employee acting in an official capacity.

No former public official or public employee shall represent a person, with or without compensation, on any matter before the gov ernmental body with which he has been associated for one year after he leaves that body, or at any time on any matter with which he was involved while a public official or public employee.

(8) No person shall use for any commercial purpose information copied from statements of financial interests required by this act or from lists compiled from such statements.

Section 4. Membership of Governmental Bodies.

The majority of the members of a non-elective governmental body, or of a committee or subcommittee of a governmental body, whether that body is elective or not, shall not have a financial interest, either personal or through a member of their immediate family or a business with which they are associated, other than an interest of a de minimus nature or an interest that is not distinct from that of the general public, in matters subject to the jurisdiction of the body or committee or subcommittee.

Section 5. Procedures Relating to Conflict Situations.

Any public official or public employee who, in the discharge of his official duties, would be required to take an action that would affect directly or indirectly a financial interest of himself, a member of his immediate family, or a business with which he is associated, other than an interest of a de minimus nature or an interest that is not distinct from that of the general public, shall take the following actions:

8

(a) Prepare a written statement signed under penalty of perjury describing the matter requiring action and the nature of the potential conflict; if he is a member of a legislative or quasilegislative body and he will not request that he be excused from voting, deliberating, or taking action on the matter, the statement shall state why, despite the potential conflict, he is able to vote and otherwise participate fairly, objectively, and in the public interest; and

(b) Deliver a copy of the statement to the commission and

(I) if he is a member of a legislative or quasilegislative body, he shall deliver a copy of the statement to the presiding officer of the body, who shall cause the statement to be recorded in the journal or minutes of the body and, upon request of the member, shall excuse the member from votes, deliberations, or any other action on the matter on which a potential conflict exists; or

(2) if he is not a member of a legislative or quasi-legislative body, he shall deliver a copy of the statement to his immediate superior, if any, who shall assign the matter to another employee, or if he has no immediate superior, he shall take such steps as the commission shall prescribe or advise to remove himself from influence over actions and decisions on the matter.

Section 6. Statement of Financial Interests Required To Be Filed.

(a) Each public official and public employee shall file a statement of financial interests for the preceding calendar year with the commission on or before May I of each year that he holds such a position and of the year after he leaves such a position.

(b) Each candidate for elective public office shall file a statement of financial interests for the preceding calendar year with the commission and with the same official and at the same time as he files his legal declaration of candidacy or petition to appear on the ballot for election as a public official; provided that this subsection shall not apply to a person who has already filed a statement in that calendar year pursuant to subsection (a). A legal declaration of candidacy or petition to appear on the ballot shall not be accepted by an election official unless a statement of financial interests is filed with him in proper form.

(c) If the candidate files his legal declaration of candidacy or petition to appear on the ballot for election prior to January 1 of the year in which the election is held, the candidate shall file a supplementary statement on or before May I of the year in which the election is held covering the preceding calendar year; and if the candidate fails to do so, after written notice of his obligation, given on or before April 1 of that year, he shall be deemed to have withdrawn his candidacy.

(d) Each candidate for public office nominated by a public official or governmental body and subject to confirmation by a public official

or governmental body shall file a statement of financial interests for the preceding calendar year with the commission and with the official or body that is vested with the power of confir mation at least ten days before the official or body shall approve or reject the nomination.

(e) No public official shall be allowed to take the oath of office or enter or continue upon his duties, nor shall be receive compensation from public funds, unless he has filed a statement of financial interests with the commission as required by this act.

Any public official or candidate for public office filing a statement with the commission pursant to this act shall file a copy of that statement with the clerk of the court in the local jurisdiction in which he retains his primary restdence. Any public employee filing a statement with the commission pursuant to this act shall file a copy of that statement with the clerk of the court in the local jurisdiction in which he is employed. The clerks of the court shall make such statements available for public inspection and copying during regular office hours and make copying facilities available free of charge or at a cost not to exceed actual cost.

Section 7. Statement of Financial Interests.

(a) The statement of financial interests filed pursuant to this act shall be on a form prescribed by the commission and shall be signed under penalty of perjury by the person required to file the statement.

(b) The statement shall include the following information for the preceding calendar year with regard to the person required to file the statement, the members of his immediate family, and any business entity in which he or members of his immediate family, individually or together, held a 10% or greater equity interest at any time during the calendar year for which the statement is required:

(1) the name, address, nature of association. and amount of interest in any business with which he was associated and in any entity in which a position as trustee was held; and, if the business or entity has done business with or been regulated by the state or any political subdivision thereof, the date and nature of such business or regulation;

(2) the name, address, and nature of business of any person from whom income in the value of $1,000 or more was received, the nature of services rendered, the amount, and, if the person has done business with or been regulated by the state or any political subdivision thereof, the date and nature of such business or regulation; provided that the source of any income received for mental health services need not be included;

(3) the legal description of all real property in the state, the fair market value of which exceeds $2,500, in which a direct or indirect financial interest was held, and, if the property was transferred during the preceding calendar year, a statement of the amount and nature of the consideration received or paid in

exchange for such interest, and the name and address of the person furnishing or receiving such consideration;

(4) the name and address of each creditor to whom the value of $1,000 or more was owed and the original amount, the amount outstanding, the terms of repayment, and the security given for each such debt; provided that debts arising out of retail installment transactions need not be included;

(5) the nature and amount of any interest of $1,000 or more in a time or demand deposit in a financial institution or in an insurance or endowment policy or annuity contract; (6) the name and address of any person from whom a gift or gifts valued in the aggregate at $25 or more were received, and the value and the circumstances of each gift; and

(7) such other information as the person required to file the statement or the commission deems necessary to carry out the purposes of

this act.

(c) Where an amount is required to be reported pursuant to subsections (b) (1) through (5) of this section, it shall be sufficient to report whether the amount is: less than $2,500; $2.500-5,000, $5-10,000; $10-25,000; $25-50,000; or more than $50,000.

Section 8. State Ethics Commission.

(a) There is established a state ethics commission composed of seven members appointed by the governor. The majority leader of the senate, the minority leader of the senate, the speaker of the house, and the minority leader of the house shall each submit to the governor a list of names of at least three individuals. The governor shall appoint one individual from each of the four lists. Of the other three members, at no time shall more than two be from the same political party.

(b) Members of the commission shall serve for terms of five years, except that, of the members first appointed:

(1) the two individuals appointed from the lists submitted by the majority and minority leaders of the senate shall serve for four years; (2) the two individuals appointed from the lists submitted by the speaker and the minority leader of the house shall serve for two years; and

(3) of the other three members, one shall serve for one year, one shall serve for three years, and one shall serve for five years.

(c) No individual shall be appointed to more than one full five year term on the commission. (d) No individual, while a member or employee of the commission, shall:

(1) hold or campaign for any other public office;

(2) hold office in any political party or politi

cal committee;

(3) participate in or contribute to any political campaign; or

(4) directly or indirectly attempt to influence any decision by a governmental body, other than as a representative of the commission on a matter within the jurisdiction of the com

mission.

(e) The governor shall declare vacant the position on the commission of any member who takes part in activities prohibited by sub-section (d) of this section. An individual appointed to fill a vacancy occurring other than by the expiration of a term of office shall be appointed for the unexpired term of the member he succeeds, and is eligible for appointment to one full five year term thereafter. Any vacancy occurring on the commission shall be filled within thirty days in the manner in which that position was originally filled.

The commission shall elect a chairman and a vice-chairman. The vice-chairman shall act as chairman in the absence of the chairman or in the event of a vacancy in that position.

(g) Four members of the commission shall constitute a quorum and the vote of a majority of the members present is required for any action or recommendation of the commission. The chairman or any four members of the commission may call a meeting provided that advance written notice is mailed to each member and to any person who requests notice of such meetings.

(h) Members of the commission shall be compensated at a rate of $50 per day and shall receive reimbursement for their actual necessary expenses while performing the business of the commission.

(i) The commission shall employ an executive director, a general counsel, and such other staff as are necessary to carry out its duties pursuant to this act. The executive director and general counsel shall serve at the pleasure of the commission. The executive director shall be responsible for the administrative operations of the commission and shall perform such other duties as may be delegated or assigned to him by the commission, except that the commission shall not delegate the making of regulations to the executive director. The general counsel shall be the chief legal officer of the commission. The commission may obtain the services of experts and consultants as necessary to carry out its duties pursuant to this act. The comptroller and the attorney general shall make available to the commission such personnel, facilities, and other assistance as the commission may request.

Section 9. Duties of the Commission.

In addition to other duties prescribed by law, the commission shall:

(a) Prescribe and publish, after notice and opportunity for public comment, rules and regulations to carry out the provisions of this act;

(b) Prescribe forms for statements and reports required to be filed by this act and furnish such forms to persons required to file such statements and reports;

(c) Prepare and publish a manual setting forth recommended uniform methods of ac

counting and reporting for use by persons required to file statements and reports by this act;

(d) Accept and file any information voluntarily supplied that exceeds the requirements of this act;

(e) Make statements and reports filed with the commission available for public inspection and copying during regular office hours and make copying facilities available free of charge or at a charge not to exceed actual cost;

Compile and maintain an index of all reports and statements filed with the commission to facilitate public access to such reports and statements;

(g) Prepare and publish monthly, quarterly, and annual summaries of statements and reports filed with the commission;

(h) Review all statements and reports filed with the commission in order to ascertain whether any person has failed to file a required statement or has filed a deficient statement;

(i) Preserve statements and reports filed with the commission for a period of five years from date of receipt;

() Issue, upon request, and publish advisory opinions on the requirements of this act; any opinion rendered by the commission, until amended or revoked, shall be binding on the commission in any subsequent charges concerning the person who requested the opinion and who acted in reliance on it in good faith, unless material facts were omitted or misstated by the person in the request for the opinion;

(k) Act as the primary civil and criminal enforcement agency for violations of the provisions of this act;

(1) Prepare and publish special reports and technical studies to further the purposes of this act; and

(m) Prepare and publish, prior to June 1 of each year, an annual report summarizing the activities of the commission.

Section 10. Investigations by the Commission.

(a) Upon a complaint signed under penalty of perjury by any person or upon its own motion, the commission shall investigate any alleged violation of this act. All commission proceedings and records relating to an investigation shall be confidential until a final determination is made by the commission. The executive director shall notify any person under investigation by the commission of the investigation and of the nature of the alleged violation within five days of the commencement of the investigation. Within fifteen days of the filing of a sworn complaint by a person alleging a violation, and every thirty days thereafter until the matter is terminated, the executive director shall notify the complainant of the action taken to date by the commission together with the reasons for such action or non-action.

(b) If a preliminary investigation fails to indicate probable cause for belief that this act has been violated, the commission shall terminate the investigation and so notify the complainant and the person who had been under investigation.